NYU Professor Clay Shirky published an essay, “Newspapers and Thinking the Unthinkable“, that suggested that journalists needed to radically rethink the assumptions that have made market-supported newspapers possible. It was a bombshell, cited and commented on thousands of times. Today, Clay outlined the arguments of the essay at the Shorenstein Center at Harvard’s Kennedy School and filled a room with journalists, scholars and others interested in his views.

Clay’s focus is the future of “accountability journalism”, the sort of serious investigative journalism that prevents corruption and keeps the powerful in check. He references the reporting done by the Boston Globe to expose abuse by Catholic priests under the leadership of Cardinal Law and his attempts to shuffle and cover for abusive priests.

His fear is that the model we’ve had through the 20th century to produce this accountability journalism is irretrievably broken. First, this model was based on an imbalanced set of intentions between newspapers and their funders. “Best Buy isn’t particularly interested in subsidizing the Baghdad newsroom – they’re paying for it because they don’t have other options” for reaching the public through display ads. Newspapers were able to systematically overcharge for advertising space because there weren’t many other options for advertiers.

These monopoly rents allowed newspapers to do speculative work which might or might not lead to stories like the Catholic priest scandal broken by the Globe. It’s similar, Clay says, to technology R&D – the only companies that systematically engage in R&D either have, or believe they have a monopoly. He cites Xerox PARC, which believed that a monopoly on photocopying paper allowed research that led to the graphical user interface, the mouse and the laptop. Investigative reporting can be thought of as “overinvestment in speculative work,” Clay suggests, something only very comfortable companies do.

Not only have advertisers been overcharged by newspapers, they’ve been underserved. Advertisers didn’t get control over reporting on their industry. When the New York Times reported on Ford’s problem with vehicle rollover, Ford threatened to pull ads. The New York Times said, in effect, “okay, where else are you gonna go?”

Media is now created by demand, not by supply – it’s printed (or downloaded) when someone wants to print it. This leads to an ad market that balances supply and demand, and in that world, the price of advertising plummets. It’s possible that the price of advertising is at its real value for the first time in history. Businesses that are in the field of matching buyers and sellers – Craigslist, Match.com – don’t choose to give their profits to fund newsrooms – they give them to shareholders.

Third, “the coherence of newspapers is no longer logical.” Clay observes that we’d never create anything as strange as the newspaper online. “Someone who just wanted a crossword puzzle – why would you next tell them about news in Tegucigalpa?” The hybrid model of the newspaper evolved because “it’s what print is capable of.”

What we’re seeing now is the move of aggregation from the server side to the client side. This leads people to worry about echo chambers and Cass Sunstein’s “Daily Me”. Clay tells us that the good news is that people appear to be interested in serendipity and authoritative sources. (I strongly question that this is supported by evidence.) But this is why the number of people who go to the New York Times homepage every day – in moving towards their own interests, readers are “tearing the paper apart.”

These changes – the fair pricing for advertising, the unbundling of information – can’t be altered by finding alternative revenue models. “The New York Times can start an online university and a wine club and it doesn’t change these factors.” Other models break as well. “Syndication doesn’t make sense in the age of the URL, as AP has figured out, which is why they’re driving people towards their own content.”

Clay offers a nightmare scenario – we may be heading to a future where every city with a population of under 500,000 sinks into systematic, low-level corruption.

To counter this nightmare, he offers a key observation. The Boston Globe doesn’t have a worldwide audience. The power of the Catholic priest expose was that a worldwide audience of Catholics found the story. “They forwarded the article and created its audience.” In 1992, he points out, a priest named Paul Shanley, was exposed by the Globe for molesting a hundred boys. The Globe ran big stories, people were outraged, but it didn’t turn into a global story, the way the Geoghan story did. The ability of people to form communities online is a critical aspect of the contemporary newscycle. But this argues against micropayments and user fees – if you’re trying to protect your news content this way, you run the danger of breaking the amplification function of groups.

The plans currently being proposed by Brill and others to restrict access to news suggests creating a monopoly (which would otherwise be illegal without a Congressional exemption) to create a public good… which in turn needs to be protected by destroying the ability to amplify and create another form of public good.

We’ve traditionally produced news through a market model involving cross subsidies. There’s another set of revenue models. We generally build cars in factories using market economics. ” But most picnics and birthday parties are the result of social production.” As Yochai Benkler and others have documented, groups of people are able to create amazing works – open source software, wikis, Off the Bus, wikileaks – through social production models.

We don’t want to replace newspapers, Clay tells us, not just because we can’t, but because we’ve created a single point of failure in our information ecosystem. Alex Jones, our host today, suggests that 85% of the serious journalism is produced by a very small set of newspapers. “We need a class of institutions and models – endowments, crowdsourcing and others – that produces 5% of accountability journalism, and we need to get it right 17 times.”

Clay is clear that he’s not dancing on the newspaper’s corpse, as some cyberutopians are. “A bad thing’s happening. People aren’t taking seriously the idea that this is going to get worse for the forseeable future. Increasing corruption is probably baked into the current environment.” We’re facing “a long trough of decline in accountability journalism,” and our goal needs to be to “minimize the depth of that trough, and hasten its end.”

He tells us, “I only take seriously people who believe newspapers are irreplaceable.” But the next questions becomes what we do next. People who feel that newsapers exist in a valid commercial space feel like we should spend whatever it takes to perpetuate the 20th century model. Others feel that the 20th century model was so unlikely, and so difficult to reproduce these days, we should be focusing on smaller, overlapping models of to create accountability journalism through vast and varied experimentation.

Alex Jones agrees with many of Clay’s points, he tells us, but says, “We don’t agree that newspapers are ready to be abandoned.” He wonders what will replace the legitimating function of newspapers, pointing out that much of what was reported in the Globe in the Catholic church scandal, had already been reported by the Boston Phoenix. The Globe’s role was to legitimate and authenticate that information.

Many of the questions put to Clay seek to identify other models for journalism that might work. Someone suggests high-quality magazines like the New Yorker or the Atlantic – Clay suggests that they’re basically nonprofits, and that when they’re profitable, they’re a leading indicator of an ad market out of control. NPR? Clay thinks that’s the model lots of media outlets are moving towards – a mix of foundation and reader/listener support. The Economist? Clay allows that the paywall might work in financial news because value comes from scarcity… but he points out that the Economist’s opinion pages are put outside the firewall so they can be amplified and have influence.

Someone asks whether transparency projects like Open Congress are sufficient to eliminate Congressional misdeeds. Clay observes that “transparency is not enough” – we need to get people to coalesce around information. But he observes that we’ve never had a model where everyone paid attention to civic corruption stories. The question isn’t whether ProPublica is reaching elites – “it’s whether it’s doing it sufficiently efficiently.”

If we believe that NPR models are the future of journalism, we may need to think about how we signal support for this form of journalism. “When I bring my NPR totebag to the farmer’s market, it’s not to protect my organic arugula from getting bruised. It’s my way of saying, ‘I’m paying for your news, show me some respect.’”

When the Rocky Mountain News folded, they sought support from their readers to continue with an online newsroom. Only 6% of readers said they’d pay to support that work, which the Rocky staffers took as a signal that their work was unappreciated. But that figure wouldn’t have shocked anyone in public radio. In that space, 6% support is quite good, not evidence that a model needs to be abandoned. We may need to reconsider how to support news around such models.

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